Schenectady to double insurance deductible to $50,000 per accident

The Schenectady City Council agreed Monday to double the city’s liability insurance deductible, raising it from $25,000 to $50,000.

This will bring the annual premium down about $100,000 to $763,000.

Council members weren’t happy about the change, but said they had no choice: If they did not approve the new contract Monday night, the city’s insurance could expire before a new deal was written. Even a two-week delay was discouraged by city officials.

“There was no time,” said Councilman Carl Erikson, the finance committee chairman. “I would’ve preferred to have more time to evaluate it and decide how we were going to go about this type of insurance.”

A year ago, after employees crashed city vehicles more than 100 times, the city was forced to increase its deductible from $0 to $25,000.

That was so high that city officials said they were essentially paying the full bill on every claim, although insurance would have kicked in to pay any costs above $25,000 per claim.

So the city went out to bid and selected a new company this year. But that didn’t help, Erikson said.

He also complained that the city received only two bids. And although the city hired a contractor to try to find a cheaper insurance policy, the final proposal came so late that Erikson didn’t have a chance to even call him.

So, with reluctance, he and the five other sitting council members all voted to accept the new $50,000 deductible.

Officials are split as to whether the higher deductible means the city will spend much more than it did this year.

Corporation Counsel John Polster argued that most claims are much less than $25,000, so the city shouldn’t end up paying much more.

“I really don’t know, in the grand scheme of things, how much difference that will make,” he said.

But Councilman Vince Riggi said some accidents could be very costly.

“My main concern is bodily injury,” he said.

Many council members blamed the city’s bad driving record for the increase.

“We are where we are because of our history,” said Councilwoman Leesa Perazzo.

The city instituted new training and accidents fell precipitously, which she said could lead to savings in the future.

“We’ve done a lot better. But this is based on a three-year period,” she said. “So we’re crawling out of the hole.”

In just six months of 2011, city workers got into 98 accidents, including 21 crashes into parked cars and 11 more into fixed objects.

In all of 2012, there were just 20 crashes. This year, there were 28 crashes through mid-October.

Polster said that indicated the city was successfully teaching employees “to exercise as much caution as possible.”